Sacked workers cash in N2.56 billion in 25% early pension withdrawal

Pension Fund contributors in Nigeria, who have lost their jobs and are still under the age of 50, cashed in a total of N2.56 billion from their pension fund contributions.

This is in line with the provisions of the Pension Reforms Act 2014, which allows pension fund contributors to withdraw 25% of their contributions if they lose their jobs and have not found any in 4 months.

This was confirmed by the Pension Commission in its second quarter report published on its website. According to the data, about 4,688 Retirement Savings Account (RSA) holders were disengaged from work but unable to secure another job within 4 months of disengagement during the second quarter.

The payment was made to former employees in the Public and Private sectors. The number of private-sector RSA holders was a whopping 4,263. A total of N4.31 billion was approved for payment to 8,221 RSA holders in the first quarter. The Pension Commission also reports that a total of 10,673 RSA holders were paid N5.28 billion for the same reasons in the second quarter of 2020.

Nigerians have suffered massive job losses due to a combination of an economic downturn and the Covid-19 pandemic. The economy has remained under severe pressure since 2019 when the world started experiencing declining oil prices.

The 25% withdrawal from RSA represents a lifeline for job seekers who need money to survive whilst they continue seeking other sources of income. Following the 25% withdrawal, the balance is paid to them as pension on a monthly basis.

Nigerian pension contributions were valued at N11 trillion in the second quarter of 2020, out of which over N7 trillion is invested in FGN Securities such as FGN Bonds and Treasury bills.

What you should Know: The total value of pension fund assets based on unaudited valuation reports grew from N10.33 trillion as at March 2020 to N11.09 trillion as at June, 2020, representing a growth of 7.36%.

· The growth was mainly due to market valuation of quoted equities.

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· There are 9, 097, 803 contributors in Nigeria up 41,074 from the first quarter of 2020.

· The growth in the industry membership was driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 41,147.